CHAPTER-1

CONCEPT OF FINANCE

INTRODUCTION TO MUTUAL FUND

OBJECTIVES OF THE STUDY SCOPE OF THE STUDY NEED OF THE STUDY PURPOSE OF THE STUDY

LIMITATIONS
METHODOLOGY

FINANCIAL MANAGEMENT INTRODUCTION

Financial management is that managerial

activity which is concerned with the planning and controlling of the firm's financial resources. Planning, directing, monitoring, organizing and controlling of the monetary resources of an

organization.

DEFINITIONS OF FINANCIAL MANAGEMENT

According to Solomon, Financial management is concerned with the efficient use of an important economic resource, namely, capital funds.

According to J. L. Massie, Financial management is the operational activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operation.

According to Weston & Brigham, Financial management is an

area of financial decision making harmonizing individual motives & enterprise goals.

OBJECTIVES OF FINANCIAL MANAGEMENT:

PROFIT MAXIMIZATION:

The traditional emphasis is macro economics has always been on the profits. It has been a macro familiar as well as reasonable guideline for the financial management. The earned sales and managerial efficiency. The duty of managers is to achieve the high possible flow of returns that will belong to the owners after all the other delegation have been met.

WEALTH MAXIMIZATION:

Wealth Maximizacin is the apropriate objective of an enterprise.Financial theory asserts that wealth Maximization is single substitute for a stock holders utility. When the firm maximises the stock holder's wealth, the individual stock holder can use this wealth to maximize his individual utility. It means that by maximizing the stock holder wealth the firm is operating consistently towards the maximizing the stock holder's utility.

DECISION MAKING IN FINANCIAL MANAGEMENT

INVESTMENT DECISIONS: These are concerned with the decisions about the investment of the funds. Funds are to be invested in fixed assets and current assets. FINANCING DECISIONS: Financing decisions are helpful in planning for a balanced capital structure various analytical techniques like EPS / EBIT computations leverage calculations & interest & dividend coverage estimates are used in the process of making the financing decisions. DIVIDEND DECISIONS: These are concerned with the disposal of profits. Dividend is generally paid as some percentage of earnings on the paid-up capital.

INTRODUCTION TO MUTUALFUND
A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is invested by the fund manager in different types of securities depending upon the objective of the scheme. These could range from shares to debentures to money market instruments. The income earned through these investments and the capital appreciations realized by the scheme are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed portfolio at a relatively low cost.

TYPES

OF

MUTUAL FUND SCHEME

BY INVESTMENT OBJECTIVE

BY STRUCTURE

Open-end Funds Closed-end Funds Interval Funds

Growth Funds Income Funds Balanced Funds Money Market Funds

OBJECTIVES OF THE STUDY

To know the work culture and methodology of the

share market

To know the rules and regulation of SEBI. To know the brokerage system of the share market

To know the difference between share market and

mutual funds. To know how the value of shares and mutual funds is

calculated

NEED FOR THE STUDY

The main purpose of doing this project was to know about mutual fund and its functioning. This helps to know in details about mutual fund industry right from its inception stage, growth and future prospects.

SCOPE OF THE STUDY

In my project the scope is limited to some prominent mutual funds in the mutual fund industry. I analyzed the funds depending on their schemes like equity, income, balance. But there is so many other schemes in mutual fund industry like specialized funds, index funds etc.

ADVANTAGES OF MUTUAL FUNDS

Diversification: Professional Management Regulatory oversight Liquidity: Convenience: Low cost:

RESEARCH METHODOLOGY

Objective of the present study can be accomplished by conducting a systematic market research. Market research is the systematic design, collection, analysis and reporting of data and findings that are relevant to different marketing situations facing the company

TYPES OF DATA COLLECTION

The primary data is that data which is collected fresh or first hand, and for first time which is original in nature. Primary data can collect through personal interview, questionnaire etc. to support the secondary data.
1) Primary data collection method

2) Secondary data collection method Secondary data easily get those secondary data from records, journals, annual reports of the company etc. It will save the time, money and efforts to collect the data. Secondary data also made available through trade magazines, balance sheets, books etc.

LIMITATIONS

No Guarantees Fees and commissions

Taxes
Management risk

THANK Q